Reliable, efficient energy key to economic recovery
14 Dec 2022
Tenaga Nasional Bhd (TNB) will ensure electricity supply remains reliable despite the energy crisis because energy is the core infrastructure to shape economic growth, especially when tapping into post-pandemic opportunities.
TNB is able to provide consistency in supply because it has diversified its energy mix for electricity generation over the years. This was in spite of the energy crisis brought about by the COVID-19 pandemic and the 2021 Ukraine-Russian conflict that drove global oil prices and other commodities such as coal to multi-year highs. This caused extreme pressure on the power generation industry in Malaysia and globally.
However, Malaysian consumers and businesses are fairly insulated from the crisis because of the various government measures such as Incentive-Based Regulation and the Imbalance Cost Pass-Through (ICPT) mechanism.
In January this year, the Energy Commission said the government will maintain the current base electricity tariff at 39.45 sen per kilowatt-hour for all electricity users in Peninsular Malaysia throughout the Regulatory Period 3 (RP3) from Feb 1, 2022 to Dec 31, 2024.
The government also announced an electricity tariff surcharge of 3.7 sen per kilowatt hour (kWh) for non-domestic users for the February to June 2022 period, while maintaining a two sen rebate for domestic users.
Meanwhile, TNB expects the ICPT to amount to RM16.4 billion when implemented between January and June 2023 versus RM7 billion in the second half of 2022.
It is worthwhile to note that to date, Malaysia relies heavily on coal and natural gas, both generating almost 93% of Peninsular Malaysia’s electricity.
Putra Business School associate professor Dr Ahmed Razman Abdul Latiff told Bernama that TNB aspires to achieve net zero and be coal-free by 2050, which will make energy costs more manageable and within the affordability range of consumers.
More significantly, he said the utility firm is targeting to reduce dependency on coal by 50% by 2035.
“In the meantime, perhaps the focus should be on efficient energy generation and management, and save-electricity campaigns to mitigate the high impact of high electricity bills.
“At the same time, (there should be some) encouragement to get consumers to consider switching energy dependency by installing solar panels on the roof of their houses,” Ahmed Razman said.
Over the next 28 years, the utility firm plans to allocate an annual RM20 billion capital expenditure to support Malaysia’s net zero agenda. It would also like to meet European electricity supply industry players for potential partnerships and investments to expedite energy transition for sustainable business growth.
Amid the high energy costs to generate electricity, increasing electricity tariffs may be unavoidable in the near future due to a combination of surging energy demand, fuel supply disruptions, and the growing shortages of oil, gas, and coal globally.
To overcome this, TNB has stepped up to educate Malaysians on the significance of environmental sustainability through power saving by launching an Energy Efficiency campaign in April 2022. This came about following Malaysia experiencing some of the highest temperatures around March, prompting higher usage of air conditioners, fans or coolers.
On the use of products such as smart meters and Maevi, the utility group recognises the importance of technology to empower and steer customers towards a future that is more sustainable and energy-efficient.
As the solar photovoltaic (solar PV) industry gains momentum in Malaysia, TNB via its subsidiary GSPARX Sdn Bhd has formed a strategic partnership with SMART Modular Technologies Inc (SMART) to enable SMART to meet its environment, social and governance (ESG) commitment of attaining 100 per cent electricity powered by renewable energy.
Through the collaboration, SMART becomes the first multinational corporation in Penang and the first US-based electronics company in Malaysia to achieve that milestone.
To date, GSPARX has successfully secured 287 projects with commercial, industrial and government organisations, generating 232 MWp of solar capacity in total. Among its clients are Mydin Mohamed Holdings Bhd, Sime Darby Property Bhd, Public Works Department and Kuala Lumpur City Hall.
The strategic partnerships in the installation of rooftop solar PV systems are to further contribute towards achieving TNB’s ESG commitments, as outlined in the group’s Sustainability Pathway 2050 strategic initiative.
The utility giant has two large-scale solar facilities, one in Sepang, Selangor, with a capacity of 50 Mega-Watt, Alternating Current (MWac) that has been operating since November 2018. Its second large-scale solar facility in Bukit Selambau in Kuala Muda, Kedah, with a 30MWac capacity, was operational in September 2020.
TNB is also building its third project in Bukit Selambau with a 50MWac capacity, as part of the government’s large-scale solar @ Mentari or large-scale solar 4 (LSS4) programme.
UiTM’s Solar Research Institute director Associate Professor Dr Nofri Yenita Dahlan expects demand for energy efficiency and renewable energy technologies to increase in the near term.
“We will see changes in consumer behaviour in managing their electricity usage to the extent where some would become ‘prosumers’, producing energy for their own use and selling the excess to the grid for greater savings.
“Various business models will emerge that offer innovative financial schemes for consumers to implement energy efficiency and renewable energy technologies, thus suppressing prices,” she told Bernama.